TigerSoft Freedom News Service 2/8/2009 www.tigersoft.com
New introduction added on 2/16/2009 - "Reality and Delusions of Bankers' Grandeur"
Zombie banker materials added on 2/22/2009.
Follow-up Blog - 10/25/2009 "Obama Promises No Hair Cut for Coupon-Clippers"
NATIONALIZE THE BIG BANKS.
"Socialism" Is Not A Four-Letter Word. But "Bank" Is.
A Nationalized Bank Would Start To Make Loans Now.
Real Leaders Would Break with Those
Who Caused The Caused The Depression of 2009.
Bernanke Says He Bears No Responsility for The Collapse.
Updated 2/12/2009 - Roubini agrees that Nationalization of Bad Banks is best solution.
2/15/2009 - Roubini tells Geithner not to wait too long to nationalize the biggest banks.
2/22/2009 ---- ZOMBIE BANKERS - See his description and what he feeds on.
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by William Schmidt, Ph.D. - Creator of TigerSoft
(C) 2009 All rights reserved. Reproducing any part of this page without
giving full acknowledgement is a copyright infringement.
Delusions of Grandeur
and The New Bankers' Reality.
2/16/2009 Taxpayers now are the biggest owners of Bank of America (6%)
and CitiGroup (7.8%). Serving the interests of its biggest corporate
campaign contributors, Wall Street and Goldman Sachs, in particular,
the Obama administration wants to create a "bad" bank to buy the
"toxic" loans that banks made when they greedily arranged loans
on the assumption that housing prices could only keep rising. Why
did these banks make such a foolish assumption? Greed. Pure
and simple. Their big bonuses required this leap of faith. When
the housing bubble broke, the insiders at CitiGroup and Bank of
America quickly sold millions of shares of their stock. They knew
exactly what they were doing.
Now the bank executives, so used to giving commands and
living an unreal life of unsustainable wealth, where 1% of the
US population owns 50% of the country's wealth, must learn to
take commands from the Government, instead of bossing them
around. They must learn to live like mere mortals, despite the
fact that their banks will likely need two trillion more to ride out
the gathering depression. This is a sum that only the Government
has. Bankers refuse to acknowledge the high likelihood of
falling house prices for another year or more. Housing prices
are probably still over-extended by 20%, of they simply
revert back to the mean of their longer term trand.
The biggest bankers still do not get it. Americans blame them
for the mess we are all in. They reject, 20:1 the concept of
"socialism for the rich". Naturally, these bankers and their
minions at Barrons and Treasury Secretary Geithner, decry
the obvious, nationalization. They still think a taxpayer bailout that
assumes all the risk while the bankers get all the rewards in a
recovery is their brithright. How absurd! Until these misconceptions
are dispelled, Main Street will suffer and Wall Street will flounder
around without finding a bottom.
2/16/2009 NATIONALIZE THE BIG BANKS. People who don't like
the word "socialism", should reconsider it. Nationalizing
the "bad" banks is the cheapest alternative now. It is now
necessary to avoid a Depression. A DJI break below 7400 will
probably start a new stock market free-fall. That will bring
a whole new wave of layoffs and forced selling. The forces
of Deflation cannot be corrected until people have jobs again.
A nationalized bank can extend needed credit and make needed
loans to businesses. Banks will not in this environment. They
will become still harder pressed by a new wave of bankruptcies
If CitiGroup and Bank of America were nationalized, lending
could then be started immediately. A strong recovery will start
sooner. The Stock Market will stop falling. Later, the nationalized
banks can be broken up and privatized when the economy is
back on a firm footing. Doing another TARP-II and then a
trillion dollar TARP-III and TARP-IV as Geithner wants will
not solve the basic problems: 1) that the biggest banks are
badly run, 2) that housing prices are still too high and the
government can't and should not prop them up and 3) Obama
continues to rely upon advice from the very people (Geithner,
Summers and Bernanke that caused this mess.
The SP-500 turned down today very sharply.
Geithner's new bank-bailout plan is not seen by Wall Street
as a solution. $2 trillion dollars is what Geithner says the banks
may need to be "stabalized".
Don't Reward Reckless Ineptitude
Eighteen billion went to bonuses on Wall Street in 2008,
a disastrous year for investors. Many of these banks got billions
from TARP-1 under Paulson. Why reward incompetence? These
people are lucky to still have jobs after their terrible performance.
Who says that incomptents can survive more easily in a public
America has had socialism for the rich for a long time. One
percent owning 50% is the result. The government must help
everyone. Government is not a "barren whore" and private
jobs are no better than jobs working in public health, a library or
a school. Building safe roads, bridges and dams is every bit
as honorable as sitting around a board room and scheming how
to charge 25% interest rates on someone of very modest income.
It was the unregulated excesses of "free markets" that have
proven most expensive. It is wrong, plain wrong, to give the
bankers who caused this mess any more money. $500,000/year
pay is still far too high for the miscreants who made this mess.
Geithner and Bernanke are talking about another two or even
three dollars in private/tax payer bailouts for private banks to prevent
"systemic failure". The private bank model has already failed.
There are a lot more banks that will go bust. Bailing them
all out is UNFAIR and REWARDS GREEDY INCOMPETENCE.
Guaranteeing their bad loans is just plain "BAD".
Obama and Gethner dread the word "nationalize". Nobel prize
winning economist Paul Krugman says the "Obama administration
is tying itself in knows to avoid this outcome." His Wall Street
campaign contributors did paid him not to do this. Obama has
said the US is not Sweden. (Really. He said this.) "Obama said
many banks are well managed and shouldn't be treated the
same way as banks that need government assistance. "JPMorgan
being a good example," Obama said. "Jamie Dimon, the CEO there...
I don't think he should be punished for doing a pretty good job
managing an enormous portfolio." Obama may mean that a
a national bank would have an unfair advantage over other banks.
But he is vague and evasive. A national bank would, at least,
have the advantage of being able to make needed loans, be
transparent, more easily regulated and do away with wasteful
Garry Evans, a chief Asian equity strategist with HSBC in Hong Kong, called the plan
"muddled." He said the government was skirting around what many investors have already
concluded: that the U.S. may have to nationalize the banks for a period...They (U.S. officials)
have still philosophically backed away from the ultimate conclusion, which is the government
will have to take over financial institutions," he said. "Philosophically that's quite hard for
the U.S. government to admit, but the history of banking crises shows that is what governments
usually do." ( Source. )
"Obama is receiving bad advice from "experts" who are cognitively (and financially) captured
by the plutocracy. He needs to fire up his Sectera (Blackberry version NSA) ASAP and go outside
of the DC bubble. Better still, take a weekend at Camp David with Krugman, Rogoff, Roubini, Stiglitz
and others that are outside the DC circle; no one else, very hush hush and run an exercise of compare
and contrast their advice versus his "experts". I'm sure our President would be in for a rude, but salutary
awakening." ( LePlouc - http://www.interfluidity.com/posts/1233393659.shtml )
MORE BAILOUTS ARE COMING!
Can the US afford badly run banks and vastly overpaid